Budget puts recession in the past

 

Budget puts recession in the past

 

Date: September 12, 2013
by: Nolan Peterson | News Editor

 
 

Like hunkered-down Florida residents poking their heads outside for the first time after a hurricane, the Sarasota County Board of County Commissioners has looked to the parting economic skies following the Great Recession and asked, “Is it over?”

If Sarasota County’s proposed budget for fiscal year 2014 is any measure, the commissioners’ answer is: “Yes — we hope.”

With relatively little pushback from area residents, the County Commission gave an initial nod at a Monday-night public hearing to a proposed $1.1 billion budget for fiscal year 2014 —a 17% increase over last year’s $896 million budget.  

The 2014 budget, which takes effect Oct. 1, rolls back most of the austerity measures implemented to help the county ride out the worst economic crisis since the Great Depression.

The proposed spending plan pays for 116 new county employees, $4.2 million in pay raises, and new services, such as the county taking control of right of way mowing. The budget also accounts for the one-time costs of projects intended to increase the county’s appeal as a tourist destination.

Sarasota County’s economy appears to have emerged from the economic downturn dinged, but not beyond repair. According to data from the Florida Department of Economic Opportunity, Sarasota County’s current unemployment rate is 7%, slightly below Florida’s 7.1% average and the 7.6% average nationwide.

Although Sarasota County’s current unemployment rate is an improvement from last year’s 12-month average of 9.2% and translates to more than 3,000 new jobs, it is still well above the pre-recession years. Sarasota County’s unemployment rate was 2.6% in 2007.

Other markers of success, such as improving property values and record-breaking tourism numbers, have led some commissioners to back ditching the austerity measures, such as lowered millage rates and rolled-back services that carried the county through the Great Recession, and seek long-term growth.

“I want the people of Sarasota County to know that we are not in trouble,” County Commissioner Joe Barbetta said. “There is a lot of money in this county.”

Monday’s proposed budget taps into money set aside in rainy-day reserves, such as the economic uncertainty fund, to cover an anticipated $46 million revenue shortfall.  

“We’re not spending wildly,” Barbetta said. “The economic uncertainty fund is being used exactly for what it was intended. If we don’t use that money, we might as well give it back to the taxpayers.”

Despite the increase in spending, the county millage rate will not increase next year. Property-tax revenue is still projected to increase by about $6 million, due to a 4.2% increase in property values countywide. 

The county also recently reduced its emergency-reserve fund from a 90-day reserve to 75 days —freeing up $8 million for one-time economic development projects like a proposed BMX track that could host elite competitions.

Commissioners voted 4-1 to approve Monday’s proposed spending plan. Commissioner Christine Robinson was the one dissent, echoing concerns she expressed at a Friday financial planning workshop about tapping into reserve funds.

“We have to control how we spend this money,” Robinson said at Friday’s workshop.  “If the money is there, we don’t just spend it.  Not unless we need it.”

Monday’s public hearing came after a contentious financial planning workshop last Friday that split the County Commission concerning one fundamental question: Should Sarasota County tap into its reserves to expand tomorrow’s economic base, or leave those funds untouched to preserve the financial safety nets that allowed Sarasota County to weather the economic downturn?

Barbetta pushed to invest in projects that will bring high rates of economic return to the area and expand the tax base.

“I’m a conservative, but I’m also a businessman,” Barbetta said. “It’s not good business if you’re tying up $4 million to $5 million that’s just sitting there, only getting 1% to 2% rate of return, when, in reality, it could be doing a lot more elsewhere.”

Robinson disagreed.

“We can’t turn our head to that model in 2016; we can’t ignore that red number,” Robinson said in reference to a projected budget deficit for fiscal year 2016 based on current spending levels and projected area growth. “We’re spending more than we’re taking in, and not in a strategic way. Businesses and individuals don’t plan on money they’re not sure they’re going to get, and that’s what we’re doing.”

“I disagree completely with the idea that we haven’t done this with careful planning,” County Commissioner Nora Patterson said Friday in response to Robinson’s remarks. Patterson shared Barbetta’s opinion about the need to expand the county’s economic base, but echoed Robinson’s reservations about the level of spending.

“I think we’re just fine, but we have to be very cautious,” Patterson said. “We can’t say yes to everything in the name of economic development.”

The schism about what to do with reserve funds had as much to do with uncertain economic projections as it did with differences of opinion.

Steve Botelho, Sarasota County chief financial planning officer, presented the County Commission with a five-year general-fund model comprising four different projections based on differing estimates of taxable value growth, major revenues, expenditures and reserve fund spending. Botelho said the goal of all the scenarios was to keep any financial shortfalls at least two years out.

“These are only estimates about new growth and the improving economy,” Botelho said. “There are so many variables and what-ifs; we know things will change.”

The fiscal year 2014 budget allotted $243 million for the general fund —a 7% jump from 2013. The County Commission controls about 47% of the general fund, more than $114 million.

County Commissioner Charles Hines called Friday’s sometimes-testy discussion a “good, positive debate.” There was, however, one particularly tense moment between Robinson and County Administrator Randall Reid.

“What you said was not appropriate,” Robinson said in response to Reid using the word “rhetoric” to describe portions of Friday’s budget discussion. “This is a healthy discussion that needs to be had. You labeling it as rhetoric is not helpful or constructive.”

Reid backed off the remark, but stood firm on his defense against an earlier assertion by some commissioners that he and his staff had not provided enough information to anticipate fluxes in the budget.

“The priorities in the budget need to be those of the board,” Reid said in his opening remarks Friday. “We need to meet the needs of the county without putting ourselves in financial jeopardy.”

The next budget adoption public hearing is scheduled for 5:30 p.m. Sept. 23, at the Robert L. Anderson Administration Building, 4000 S. Tamiami Trail, Venice.

 

SHARE
Login Register now

Currently 0 Responses

Login below to post a comment or click register.
Account E-Mail
Password
forgot password? click here
Speak Your Mind Below!

Classifieds

1970 Main Street, Sarasota, FL 34236 941-366-3468

Copyright 2014 The Observer Group Inc., All Rights Reserved